In this March 26, 2015, file photo, Consumer Financial Protection Bureau Director Richard Cordray speaks during a panel discussion in Richmond, Va.Since it opened for business five years ago, the bureau estimates it has returned about $12 billion to some 27 million consumers harmed by deceitful or questionable financial practices. Yet eviscerating the bureau is high on the to-do list of both President-elect Donald Trump and Republican lawmakers. Trump has vowed to “dismantle” Dodd-Frank, the financial reform law that put banks on a tighter leash and created the CFPB after the 2007 subprime mortgage crisis. House Republicans this month passed a bill, known as the “REINS Act,” that would limit federal agencies’ rule-making ability. Steve HelberAssociated Press file

In this March 26, 2015, file photo, Consumer Financial Protection Bureau Director Richard Cordray speaks during a panel discussion in Richmond, Va.Since it opened for business five years ago, the bureau estimates it has returned about $12 billion to some 27 million consumers harmed by deceitful or questionable financial practices. Yet eviscerating the bureau is high on the to-do list of both President-elect Donald Trump and Republican lawmakers. Trump has vowed to “dismantle” Dodd-Frank, the financial reform law that put banks on a tighter leash and created the CFPB after the 2007 subprime mortgage crisis. House Republicans this month passed a bill, known as the “REINS Act,” that would limit federal agencies’ rule-making ability. Steve HelberAssociated Press file

Hey, America, wake up and beware of a post-consumer watchdog world

Many Americans were outraged by Republican lawmakers’ attempt last week to get rid of Congress’ independent ethics watchdog and instead oversee themselves. House Republicans backed off after their offices were flooded with angry messages – and after Tweeter-in-Chief Donald Trump questioned the timing of the move (although he didn’t say gutting the Office of Congressional Ethics was a bad idea).

What I was left wondering was this: If Americans were so quick to recognize the ridiculousness of allowing the foxes to guard the congressional hen house, why are they seemingly so apathetic about Republicans’ declared goals of deregulating big banks and shutting down the highly successful Consumer Financial Protection Bureau?

Clearly many of us believe lawmakers can’t be left to police themselves when it comes to keeping their noses clean. Yet we’re cool with giving more regulatory freedom to banks, credit card issuers, mortgage lenders, payday-loan companies and other financial firms with long track records of mischief and malfeasance?

“I’d say it’s more a matter of what the public understands,” said Ross Levine, a professor of banking and finance at UC Berkeley. “Ethics is clear-cut. It’s easy to understand. Financial regulation is super complicated.”

True. But that’s not to say that the value of reasonable oversight can’t be put into simple terms.

On Monday, for example, the Consumer Financial Protection Bureau ordered a pair of medical debt collectors to pay more than $577,000 in relief to thousands of consumers “for falsely representing that letters and calls were from attorneys … when no attorney had yet reviewed the account.”

And earlier this month, two of the top credit bureaus, TransUnion and Equifax, agreed to pay more than $23 million in fines and restitution after the bureau charged them with deliberately misleading and cheating members of the public.

The entire problem with regulation is that it doesn’t target the correct people – the decision makers.

Ross Levine, a professor of banking and finance at UC Berkeley

The bureau said the companies tricked people by offering access to credit scores that “were not typically used by lenders,” often making them useless as tools for determining one’s creditworthiness. The companies also didn’t make clear that credit-related services that appeared to be free or to cost only a buck actually involved a monthly fee of at least $16.

These are only the latest examples of the CFPB performing its role as a financial watchdog. Since it opened for business five years ago, the bureau estimates it has returned about $12 billion to some 27 million consumers harmed by deceitful or questionable financial practices.

Yet eviscerating the bureau is high on the to-do list of both Trump and Republican lawmakers. Trump has vowed to “dismantle” Dodd-Frank, the financial reform law that put banks on a tighter leash and created the CFPB after the 2007 subprime mortgage crisis.

House Republicans this month passed a bill, known as the “REINS Act,” that would limit federal agencies’ rule-making ability. “Excessive regulation means higher prices, lower wages, fewer jobs, less economic growth and a less competitive America,” declared Robert W. Goodlatte, chairman of the House Judiciary Committee.

The Republicans’ no-rules-are-good-rules stance mirrors that of many business leaders, who say the market can do an adequate job of ensuring good behavior by corporate players.

Needless to say, that’s like a kid with crumbs on his face saying he can be trusted not to take any cookies.

“There’s a need for oversight because we’ve seen what happens without oversight,” said Lawrence Harris, a professor of finance and business economics at USC. “It’s pretty obvious that there’s a need to regulate financial institutions.”

Case in point: Wells Fargo. The bank was fined $185 million in September for opening as many as 2 million customer accounts without permission. The bad behavior dated back to 2011, federal authorities said.

Most experts I spoke with said it never hurts to re-examine regulations and tweak rules as needed. While a regulation may be well-intended, its implementation may have unintended consequences.

Dodd-Frank was aimed primarily at getting the biggest banks to straighten up and fly right. But setting the law’s compliance threshold at $50 billion in assets caused many smaller institutions to be saddled with needlessly burdensome rules. That could be fixed by raising the asset threshold to $100 billion or more.

Wholesale deregulation, on the other hand, is seen as an invitation to disaster.

“Deregulation is the fuel that will bring about the next financial crisis,” said Kristin Johnson, a Georgetown University law professor who focuses on financial markets.

UC Berkeley’s Levine said that if lawmakers want to make truly effective changes, they should go after not individual companies or industries but the senior executives that lead them.

“The entire problem with regulation is that it doesn’t target the correct people – the decision makers,” Levine said.

There’s a need for oversight because we’ve seen what happens without oversight.

Lawrence Harris, a professor of finance and business economics at USC

Again, look at Wells Fargo. That $185 million fine certainly punished shareholders. In the wake of the scandal, the bank’s stock fell nearly 10 percent to the lowest level since early 2014.

Yet the company’s then-CEO, John Stumpf, was able to step down with a stock and retirement payout estimated at $134 million. Carrie Tolstedt, the Wells Fargo exec who oversaw the division that opened all those bogus accounts, exited the bank with an almost $125 million payday. Neither she nor Stumpf faced any civil or criminal charges.

If Republicans sincerely want to revamp regulations, they should hold senior managers accountable for a company’s unethical behavior.